Duties of agent

The agent performs work on behalf of principal. Therefore, an agent has the following duties towards the principal. NCA, 2056 in Section 59 has made some provisions to this regard.

  1. Duty to follow the principal’s instruction: –

It is the duty of every agent is to act within the scope of the authority conferred upon him and perform the agency work according to the directions given by the principal. When the agent acts otherwise, if any loss be sustained, he must account for it.

  1.  To follow the custom of trade (s. 591(b)): –

It is the duty of an agent to perform the work in accordance with the law, practices and custom, where expressly no instruction is made by the principal. If the agent does not do so, he is liable for the loss sustained by the principal.

  1. To act in good faith or with reasonable skill and diligence: – Another duty of the agent is to conduct the business of agency in good faith or with reasonable skill and diligence. In other words, unless otherwise mentioned in the contract, the agent has to do the work entrusted to him in good faith or intention, with full dedication and necessary skills and efficiency. The agent is liable to compensate the principal for any loss caused by his own neglect.
  2. To render proper accounts to the principal: –

The agent has to maintain the account properly. The agent has to render proper account to the principal or provide detail of accounts and records on principals.

  • To communicate with the principal: –

It is the duty of an agent, in case of difficulty, to use all reasonable diligence in communicating, with his principal and in seeking to obtain his instructions, before taking any steps in facing the difficulty or emergency.

  • Not to make secret profit: –

An agent stands in a fiduciary relation to his principal and therefore he must not make any profit (secret profit) out of his agency. He must pay to his principal all moneys received by him on principals account.

  • Not to disclose confidence: –

To operate the business activates, it is necessary the confidence between the agent and principal. Therefore, not to disclose the confidential matters with his principal to others is required between them.

  • To pay all sums received for principal: –

The agent must pay to the principal all sums received on his behalf.

  1. Not to delegate his authority and responsibility: –

An agent cannot delegate his authority or employ another to perform acts which he has expressly or impliedly undertake to perform personally. Ordinarily an agent cannot further delegate the authority which has been delegated to him by his principal.

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Author: smriti